Markets Are Starting To Beware Of A Series Of US Economic Data, Rupiah Has The Potential To Strengthen
JAKARTA - The rupiah exchange rate in trading Thursday, October 31, 2024 is expected to move higher against the United States (US) dollar.
Quoting Bloomberg, the Rupiah exchange rate on Wednesday, October 30, 2024, the rupiah exchange rate on the spot market closed up 0.42 percent at the level of Rp. 15,705 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed higher by 0.18 percent to a price level of Rp. 15,732 per US dollar.
Director of PT. Laba Forexindo Berjangka Ibrahim Assuaibi said the market was also vigilant before a series of signs about the US economy and interest rates in the coming days.
Additionally, third-quarter gross domestic product data will be released on Thursday, while PCE price index data, the Federal Reserve's preferred inflation gauge and non-farm payroll data will be released on Friday.
"The data appeared a few days before the Fed meeting, where the central bank is widely expected to cut interest rates by 25 basis points," he said in a statement quoted on Thursday, October 31.
Ibrahim explained that tensions in the Middle East are still happening, considering Iran still vowed to retaliate against Israeli attacks recently. Israel also continues to carry out bombings and attacks on Hamas and Hezbollah, which present limited scope for de-escalation in the conflict.
Meanwhile, from within the country, Economists predict that government debt in the Prabowo Subianto era has the potential to increase to IDR 12,893.96 trillion in the next five years. Based on the World Economic Outlook (WEO) document released by the October 2024 edition of the International Monetary Fund (IMF).
Economists assessed that the projection from the international institution did see a decrease in the debt-to-gross domestic product ratio (GDP) ratio in 2029 to 39.57 percent. The position of government debt is projected to increase nominally even though the ratio is stable like the current position, which as of August 2024 is 38.49 percent.
The increase in debt is none other than the increase in spending, while income is stagnant. As a result, the deficit will continue to increase nominally. It is noted from the IMF projection that state revenue is projected to increase nominally but stagnantly Meanwhile, the percentage of GDP in the 2025-2029 period is in the range of 14.5 percent. State spending is also projected to increase nominally and the ratio is stagnant at 17 percent.
Baca juga:
Government debt cannot be reduced because the current debt also the government pays with new debt withdrawals. From the other side, the projection from the IMF is at the same time persuading the government to be more disciplined in spending. The reason is, it is believed that the projection has not considered the addition of significant spending by Prabowo.
Previously, the position of government debt reached Rp8,461.93 trillion as of August 31, 2024 or equivalent to 38.49 percent of GDP. This amount decreased by around Rp40.76 trillion compared to the position of government debt in the previous month or July 2024 of Rp8,502.69 trillion. The composition of government debt consists of Rp7,452.65 trillion from state securities (SBN) and loans of Rp1,009.37 trillion.
Ibrahim estimates that the rupiah will fluctuate but close higher in trading Thursday, October 31, 2024 in the price range of IDR 15,650 - IDR 15,720 per US dollar.